From Monday 27 April, people with car finance plans will be able to receive a three-month payment window.
The FCA has asked for lenders to support borrowers and offer payment holidays. The guidance includes:
For borrowers financially affected by coronavirus, car finance lenders will have to offer a three-month payment holiday, which permits the customer to make no payment to their contract. However, interest will still accrue during this time.
If a payment holiday isn’t suitable. For example, if you’re already in arrears, lenders will be expected to offer other solutions. They can’t just say no.
Repossession of vehicles
For borrowers struggling financially because of coronavirus, lenders will not be able to repossess their vehicle.
Where any of the above may apply and the lender draws up a new agreement with the borrower, the FCA has called for lenders to not take advantage and make any significant changes to the contract.
The FCA has stressed the guidance and proposals only apply to those impacted financially specifically because of the coronavirus. It does not apply to agreements for business purposes.
The guidance will be reviewed in the next three months considering the changing circumstances.Back to top